Snafu: Situation Normal at DOE…

…but all fouled up at USEC, the company that enriches a lot of the uranium in the United States. The Department of Energy has turned down USEC’s loan guarantee application, making it difficult-to-impossible, says USEC, for it to acquire funding to finish its American Centrifuge project. This has led to a pair of dueling press releases that are fascinatingly disjunctive. Let’s look at USEC first:

“We are shocked and disappointed by DOE’s decision. The American Centrifuge met the original intent of the loan guarantee program in that it would have used an innovative, but proven, technology, reduced greenhouse gas emissions and created thousands of  immediate jobs across the United States.

The American Centrifuge is not a new idea. It was first ideated by the Department of Energy in the 1970s as a next generation enrichment facility and abandoned after a successful test in the 80s. USEC, which spun out of DOE as a private company, reactivated the project and, in its words, improved the original design using “modern materials, advanced computer-aided design, digital controls and state-of-the-art manufacturing processes.” You can read more about the project here.

And now, nothing. USEC said it will have to cease work on the facility, though it is close to finished. All fouled up.

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But is it? From DOE’s perspective, it’s situation normal. There’s no reason for USEC to be shocked and disappointed:

The Department of Energy announced today that it will further expand and accelerate cleanup efforts of cold-war era contamination at the Portsmouth site in Piketon, Ohio – an investment worth about $150 to $200 million per year for the next four years that is expected to create 800 to 1000 new jobs. 

Well, that’s something. Here’s DOE Secretary Steven Chu on the centrifuge itself:

“While we believe USEC needs time to develop its technology and demonstrate that it can be deployed at a commercial scale, we’re moving forward with other investments that will create good, high-paying jobs in the community. USEC will have another chance to resubmit their application if they can overcome the technical and financial hurdles, but in the meantime we’ll put more people to work in the environmental cleanup effort.” 

And there’s more. Here’s Chu again:

Therefore, the Department is offering up to $45 million over the next 18 months to support ongoing ACP research and development activities.  Should USEC accept this offer, it would allow them to continue operations, maintenance, and research activities at Piketon and Oak Ridge, and give USEC additional time to strengthen the technical and financial aspects of the application should USEC decide to resubmit it.

“Should USEC accept this offer…” That sounds like a recognition that USEC might well not accept the offer.

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Back to USEC:

“With DOE’s decision, we are now forced to initiate steps to demobilize the project. We deeply regret the impact this decision will have on all those affected, but as we have stated in the past, a DOE loan guarantee was the path forward to completing financing for the project.

That’s USEC’s President, John Welch. Here’s some more from him:

Instead of creating thousands of jobs across the country, we are faced with losing them. Instead of reducing our dependence on foreign sources of energy, we are now increasing it. President Obama promised to support the loan guarantee for the American Centrifuge Plant while he campaigned in Ohio. We are disappointed that campaign commitment has not been met.’

Disappointed – and shocked – and more than a little upset. Hard words. You would think DOE killed the project outright.

So does USEC have to mothball the project? There is money for it, for more research anyway, though clearly USEC thinks it is ready to move forward now. Equally clearly, DOE does not.

It’s a bit of a snafu.

Read through the material and see what you think. You would almost think DOE and USEC haven’t said two words to each other in years and still can’t directly communicate. That’s far from the truth.

(In fairness, here’s DOE’s fact sheet called “Job Creation in Piketon, Ohio,” the home of the centrifuge site – this was posted today. It seems as though DOE really doesn’t want to catch flak from USEC over potential job losses.)

Snafu, the word, emerged during World War II as an acronym for the phrase we’ve used here, though we bowderlized it for NNN’s family trade.

Speaking of World War II, Private Snafu is a cartoon character produced by Warner Bros. and created by Theodore Geisel (a.k.a. Dr. Seuss) but only seen by soldiers. Private Snafu’s goal was didactic, to show in amusing ways how hapless young soldiers could mess things up. For example, one of the entries is based on the idea, Loose Lips Sink Ships.

With no children present, the cartoons were a bit bawdier and with bluer language than common at the time, making them unusual cultural artifacts. You can find episodes at You Tube.